How to Take a Property Tax Deduction Without Itemizing

Posted by Amanda on February 10, 2010

Take your property tax deduction without itemizing. It’s another deduction you’ll want to claim on your 2009 tax return, as we continue our series on tax deductions. We recently reviewed the new car tax deduction.

Home ownership can have some enticing tax benefits because you can itemize and deduct home expenditures–such as mortgage interest paid throughout the year–and lessen your tax burden. However, what if you do not have enough qualifying expenditures to itemize your deductions? Prior to 2008, there was no extra tax benefit to home ownership without itemizing your deductions.

With the passing of the Housing Assistance Tax Act for 2008, and its extension for the tax year of 2009 through the Economic Rescue Plan/Tax Extender Package that was signed into law on October 3, 2008, you can claim a tax deduction for some of the property tax that you pay, even if you take the standard deduction.

Property Tax Deduction

The additional amount that can be claimed on top of your standard deduction is the lower of these two options:

  • The amount of real estate property taxes paid during the year to state and local governments; or
  • $500 for single filers and $1,000 for married taxpayers that are filing a joint return

Who Can Claim the Property Tax Deduction

Any homeowner who takes the standard deduction benefits from this tax law. This most likely includes people who are close to paying off their mortgage, or who have paid off their mortgage, and have not paid enough mortgage interest in 2009 to itemize. Also, people who have purchased a home late in 2009 may not have enough items to deduct in order to itemize.

If you bought a new home, the property tax deduction is in addition to any home buyer tax credits you may qualify for.

Where to Deduct on 1040

If you file using TurboTax, the software will help you determine where to claim the property tax deduction.

In 2008, you reported your qualified property tax deduction on line 40 of form 1040, thus lumping it in with your standard deduction. Then on line 39c of 1040, you checked the box that indicates that your standard deduction includes a property tax deduction. 

For the tax year of 2009, you now check box 40b on Form 1040 (or box 24b on Form 1040A) and attach Schedule L. The extra deduction is calculated on lines 7-9 on Schedule L. (Thanks Greg for your comment about this!)

Stay tuned for more topics in our tax deduction series and make sure you aren’t leaving any money on the table at tax time!

Update: This tax deduction expired in 2009, and was not included in the Obama Tax Cuts. Therefore, you cannot claim it on your 2010 taxes.

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Comments to How to Take a Property Tax Deduction Without Itemizing

  1. Isn’t that what 1040 Schedule L is for? I think it is required if you increase your standard deduction with property taxes.


  2. Hello Greg!

    Thank you for your comment.

    To clarify I did a bit more research and found out that the information in my article is how you increase your standard deduction by adding in property taxes for the tax year 2008.

    It turns our that for the tax year of 2009, you can increase your standard deduction with property taxes (limits mentioned above) by doing the following: check box 40b on Form 1040 (or box 24b on Form 1040A) and attach Schedule L. The extra deduction is calculated on lines 7-9 on Schedule L.

    Sorry for the confusion, and thank you for bringing it up!

    Amanda L. Grossman

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